Not so long ago, bitcoins were so volatile that it jumped thousands of dollars in a single day. But those days are long gone. Investors and speculators looking for bitcoins to jump to either extreme are in for a huge disappointment. According to Fintech CEO, the days where bitcoins doubled in a week are over.
Let us sit back for a moment and understand the situation with a broader perspective. To gain a robust understanding, let us look at the reason behind the stability, and what the future of bitcoins holds for us.
The decrease in volatility can be attributed to the fact that the crypto market is slowly maturing. Even though there might be occasional spikes and dips, Bitcoin Billionaires at large are going to be relatively stable.
For the first half of 2020, the economy has been lurching aimlessly as the pandemic gripped everyone by the throats. With the ensuing chaos, panic selling began, and the markets crashed.
However, since then bitcoins have stabilized, just like other stocks. Following the market slump in March due to the COVID-19 panic selling, bitcoins have been revolving relatively lazily around the $7500 mark.
Investors then had their energy focused on the next event: the halving. However, this turned out to be over-hyped, and consequently, the volatility of the cryptocurrency reached even lower.
All is not lost though. New companies, especially mammoth corporations, are looking to get into the crypto market. This can have a massive impact on the crypto market, and the value can soar to historic highs.
Recently, there has been widespread speculation that Paypal might launch their own crypto platform. If this is true and they manage to launch such a service, it would be a field day for bitcoins, and there is an extremely high chance for bitcoins to rise fast.
When can we see a more volatile market again?
Volatility will be at its most aggressive during the fourth financial quarter, as this is when most investors have surplus to cash to invest in and take risks. If the economy starts to improve, bitcoins might see a steady increase in its price value beginning in September.
In contrast, bitcoins might not bode well if a second COVID-19 wave hits the world.
This is because crypto is usually not a safe store of value during an economic crisis, according to Interlapse CEO Chen Wayne. Moreover, speculators and investors will be interested in the coin only during a stable economy, as most of them will focus on stocks during these uncertain times.
In conclusion, it is safe to wait until September to observe the volatility of bitcoins. As this article pointed out, the highest swings may occur between September and January.